In Business Las Vegas, November 24th, 2006
Sherman Frederick, publisher of the Las Vegas Review-Journal and president of Stephens Media Group, is one of a rare breed in the journalistic community, he’s been with the same company throughout his career since he left college.
After spending two years at Arizona State University in Tempe and a fouryear stint in the Navy, Frederick graduated from Northern Arizona University in Flagstaff and went right to work for the Review-Journal as a news intern in 1976.
He held several positions with the R-J and its parent company, formerly known as Donrey Media Group, including editor of one of the company’s newspapers in Hawaii and publisher of the Alamogordo, N.M., Daily News.
Frederick and Brian Greenspun, editor of the Las Vegas Sun, a sister publication of In Business Las Vegas, signed an amendment to a joint operating agreement last year that resulted in the Review-Journal and the Sun being distributed together daily. The newspapers continue to be operated independently.
Last year Greenspun talked with In Business about the agreement. Now, after the one-year anniversary of the deal, Frederick talks to In Business about the agreement, Stephens’ other holdings and his relationship with Greenspun.
Question:
I’m sure there are many people who live in Las Vegas who don’t know the structure of Stephens Media and the Las Vegas Review-Journal. Could you walk us through the company and some of your holdings?
Answer:
Stephens Media Group is a collection of newspapers, the largest of which is the Las Vegas Review-Journal. We also have newspapers in Hawaii, Washington state, Texas, Oklahoma, Arkansas, Tennessee and North Carolina. I am the president of the Stephens Media Group and the publisher of the Las Vegas Review-Journal. We have a small corporate staff that all work out of Las Vegas.
Question:
So you oversee the other publications in other states as well?
Answer:
Yes, there’s about a dozen dailies and a collection of weeklies and other enterprises that revolve around those dailies.
Question:
Locally, you’ve got a group of newspapers in addition to the R-J.
Answer:
The Review-Journal is the flagship, obviously. We have weekly newspapers in Pahrump, Tonopah and Ely. And, we have a collection of weekly newspapers that are total-market saturation weeklies in Las Vegas. And then, we’ve expanded out into niche publications, El Tiempo, which is a Hispanic weekly, the Business Press and an alternate publication, CityLife. We have some magazines, mostly magazines that are hinged off of the big categories within our daily newspaper, Luxury, for example.
Question:
How is the company growing? Is it buying more newspapers? Is there any additional growth on the horizon in the company’s Las Vegas operation?
Answer:
We’ve grown some by acquisition and I’d say that would probably be our No. 1 area of growth. We’ve also grown by start-ups. And I failed to mention in the structure that we also are a part owner in a California partnership, which includes quite a few newspapers in the Los Angeles and San Francisco areas. A lot of our growth, especially our bottom-line growth, is coming out of California.
Question:
One of the criticisms I often hear is, “For a city the size of Las Vegas, its dominant daily newspaper should have a lot larger circulation.” How do you respond to that?
Answer:
I don’t agree with that, partly because I don’t know what “should” means. What happens generally is that the bigger the city, the lower the penetration. I guess I would agree with the fundamental premise, which is that all publishers want to have more circulation. That’s part of the reason we’ve gone to saturation publications, like the weeklies, and the niches. Not long ago, I had our marketing department crunch some numbers for me. We touch every household in Las Vegas six times a week with either direct mail or newspapers or niches or magazines. Obviously, that’s not a perfect number, but that is our best guess. And that gives us the best possible shot at being the end-all, be-all for media in Las Vegas. It quite obviously cannot be done only through the daily newspaper. There has to be other media, especially with the Internet, which is the hot issue right now. We’re actually not unhappy at all with our total readership if you include the Internet with our print.
Question:
If the newspaper industry is shifting to online media, how are your publications responding?
Answer:
Everybody has a Web site. That’s kind of 101. We’re starting to get into replica technology, which is the paper as it appears in newsprint is then downloaded onto the Internet. You can pick it up as it actually looks in the paper. I don’t know if that’s going to be the future of newspapers. It might be part of the picture, but I don’t know that replica technology will be the end-all, be-all. We do know that there are people out there who want to read the paper just as it appears. It’s not enough for them to have 25 stories with headlines on them. They kind of want to know where it went, what it went against, what pictures went with it. They still want to have that look and feel of a newspaper, but they need to have the convenience of being able to read it quickly in Washington, D.C., or wherever.
Question:
Why do Las Vegans not read newspapers as much as residents of other cities? Or do you think they’re just reading other publications from their former hometowns?
Answer:
We think that when people move to town, they still have some affinity with wherever they came from, but it doesn’t take long before they start getting interested in what’s going on here with the City Council or planning or entertainment. So we don’t see that as a real business block.
Language is a big block. Most of our growth has been via Hispanics, but if you can’t read English, it’s pretty tough to be the English-speaking newspaper and be meaningful to that home. So we’ve been struggling with that. I don’t know that we have the answer. In fact, if we had the answer, everybody would be beating our door down. But we are doing a weekly newspaper that is in Spanish. It has a little bit of an entertainment bent to it. We’re not unhappy with how that’s gone, but we have not been as successful at leveraging those readers into the daily newspapers.
We’re still looking for that Holy Grail. But I do think that’s part of the equation when it comes to Las Vegas growth. You also have a tremendous number of part-time residents. Some people like to call them “tax residents.” Far be it from me to suggest that someone would move here for the sole purpose of not having a state income tax, but we do see a phenomenon of, yes, there’s an occupied house, but no, no one lives there. And if don’t live here, you’re not going to take the daily newspaper.
Again, we think the replica technology may help that because sometime in the future, when we approach a new person to subscribe to the newspaper, they may have the option to read it online or read it at their house and it may be seamless and they may tell us when they want it delivered to their house and when they’ll just pick it up online.
That certainly would be good for business travelers. We have a lot of business travelers who want to keep in touch with what’s going on in Las Vegas, but they’d really like to do more than just the Web site. So that’ll be a solution to a certain number of travelers with Las Vegas ties, but it may also be a solution for people who live here, but are visiting somewhere else or have a second home somewhere else.
Question:
A year ago, you and Brian Greenspun, the president of The Greenspun Corporation, hammered out an unusual amendment to the joint-operating agreement that enables The Sun to be published with the Review-Journal every day. A year later, how has that worked?
Answer:
It’s worked well. Contrary to popular opinion in the Las Vegas Review-Journal newsroom, there was not a revolt. We do have some readers who think the Sun is too liberal for them, and we think there probably are some Sun readers that think the Review-Journal is too conservative for them. But I believe that most people like it or are tolerant of it. And I’m almost certain of that because we’re just not seeing scores of people calling and saying, “I can’t deal with this.”
Question:
The comments I’ve heard around town have been mixed, with some readers saying they don’t like the arrangement because they don’t like one paper or the other, while some say they enjoy having different viewpoints presented in one package. What’s your take?
Answer:
My bias is they like it. Most of the enlightened conservatives and liberals understand that it’s better to have both views. It’s just nice to have it delivered together. I think this has been a difficult adjustment for the Sun, in my opinion. We don’t have anything to do with how the Sun does that. By necessity, it’s completely separate. But my observation from afar is that it’s been a difficult adjustment.
I don’t envy the Sun newsroom the task. This is, as Monty Python said, “Now for something completely different.” However, I’m seeing flashes of brilliance in the Sun and if they can find ways of sustaining those flashes, this is going to be a huge winner. I think it may be the path for afternoon JOAs (joint operating agreements) in the future.
Question
Have other JOAs inquired about this arrangement?
Answer:
No, we really haven’t had any. We’ve had a lot of interest from people just asking how it’s going. But we haven’t had anybody come in and say, “Look, we’re going to do the same thing.” You know, it’s not brain surgery. It’s pretty easy to figure out how to do it. It’s just mustering up the guts to do it. It’s not easy and I’m sure Brian (Greenspun) will tell you that thinking about the possibility of going to a smaller version of the Sun was probably scary.
But we did a lot of the math on it – I’m not talking about the financial math, I’m talking about the news math – and if you measure the news content of the Las Vegas Sun, inch by inch, it compares to the news coverage that major metropolitan newspapers give their city – the Washington Post, New York Times, Los Angeles. The Las Vegas Sun has, inch per inch, just as much opportunity to cover local news as the Washington Post, for example.
It’s just in a different format and it’s spread out a little more. I think once we got to the point of saying, “This makes some sense,” and once we could find the right number, it really became a difficult task to change the culture of a newspaper that has been going on for 50 years.
How do you do that? Again, from afar, I think they’ve started to figure out the news part of it. I think there are still lots of questions about sports, features, certain genres of news, movies, entertainment. But we never got into this thinking it was going to be perfect on Day 1. There have been days when it’s not been perfect, but there have been days when it’s been pretty damn good.
Question:
Wouldn’t it have been better to let both publications operate independently of each other and both come out in the morning?
Answer:
We thought about that, but we just don’t have the presses to do it. It would have taken a lot of money to make that happen.
Question:
What is your perception of the future of newspapers locally in Las Vegas?
Answer:
Great. Newspapering in Las Vegas has always been robust and probably a cut above most cities. When it comes to news, I don’t know that there’s any city outside of maybe New York, maybe Los Angeles, that beats Las Vegas for news. I can remember when I was city editor in Las Vegas in the ’70s, literally not having enough staff on at night to cover former presidents. There’s just lots of stuff going on in Las Vegas and it’s fun. Las Vegas continues to make it fun in terms of its changes.
From a business standpoint, the publicly traded companies have made this place far more sophisticated. From an entertainment standpoint, where else? I really do think that we may be as cosmopolitan as any city in the world. We may be in the top five for everything, certainly in that entertainment-restaurant area.
Question:
How much is the editorial direction of the Review-Journal directed by your management and how much of it is the publisher?
Answer:
Almost all of it comes from the newsroom. I’m interested in the news because that’s where I come from.
Question:
Is it because of your responsibilities to the group?
Answer:
No, I delegate almost all of the responsibilities of the group to our chief operating officer, so I don’t feel the need to have to go to all of these newspapers once a year, for example. I may try to get there every two or three years. I find myself going to the Hawaii newspapers a little more often and I’m not sure why (laughs).
When I first started this job, I had the feeling that I had to get out and see every newspaper every year, and after awhile I realized I don’t have go see every newspaper every year. First of all, we’ve got great publishers in all the places. We’re a very decentralized group. We try to find the best possible publisher and plant them in that place and let them run it.
Secondly, this is the flagship. There is so much going on in Las Vegas that if I’m gone for a week, I really feel like I’ve missed something. Over time, I’ve just decided that it’s not a good use of my time — I’m better off being here. When I do travel, I try to make it a partial instead of a full week. I don’t go to as many conventions as I used to. Five or six years ago, I felt like I have to go to this convention and that and I realized, “No I don’t.” Most of them come to Las Vegas anyway.
Question:
How did the libertarian editorial stance of the Review-Journal evolve?
Answer:
That’s a great question. First of all, I disavow the concept that we’re a libertarian newspaper. My bias is that it’s folks who don’t agree with us who are trying to knock us down or criticize us use “libertarian” to call us a name. It doesn’t hurt us if you call us libertarian. We think it’s more of a compliment than it is a curse. In old Nevada — in the ’70s — the ethic was kind of a live-andlet-live Western ethic. And I think that’s where we got it from.
We got it because that’s the way Western states were. We do have some editorial writers who are libertarian. I’m a Democrat, we’ve got Republicans, we’ve got Libertarians. I have found that libertarians make great editorial writers because they’ve got a foot in both camps. They understand fiscal conservatism and they tend to be socially liberal.
If you can find a good editorial writer with a libertarian bent, you’ve pretty much got the best of both worlds. I guess I’m always a little sensitive about this because it’s how people try to knock us down. “You’re libertarian.” I’m not sure what that means. This is our viewpoint on this subject. If you don’t agree with that, then articulate it. Don’t call us a name or don’t call us what you think is a name. I also think if you put a gun to most people’s heads, there’s a little bit of libertarian in almost everybody.
Question:
How much of the editorial stance taken by the R-J is duplicated in your other publications?
Answer:
It’s different. Each publisher pretty much controls that themselves. We don’t presume to tell other newspapers who they should endorse for governor or president. We don’t even do that with issues that are helpful to the newspaper industry. We just don’t feel the need to do that.
Question:
How about for your Las Vegas-area publications, such as the weeklies?
Answer:
The weeklies don’t have a lot of editorials. We’re actually starting to put our toe in the water with some editorial content, but it’s tending to be lighter. I don’t know that we’ll ever have a situation where we have the weekly newspapers taking positions on who should be the next governor.
It’s quite possible that we could have editorials in these zones that are different because Henderson may have a completely different viewpoint on some tax issue that Las Vegas may not have. So it’s possible that the Henderson weekly might be advocating something different, but we have not advanced to that level at this point. Right now, our editorial content is pretty homespun, something that can be used in all zones.
Question:
I’m going to ask you now about some of the individual publications you publish. How successful are the View publications? Are they profitable?
Answer:
They do very well. They serve two purposes for us. One, and primarily, they become a total market vehicle for us, meaning that when you take all the Views and add them all up, we are able to reach virtually all the households in Las Vegas and that allows us to place fliers and inserts into the home market, which is what most of these big national companies want. Or if they don’t want the whole market, they want everything in certain pieces of the market, and so the Views do that for us and do that very well.
By zoning these views down to neighborhoods, we’re able to go to small retailers and get them to advertise in the Views because it’s more cost-effective. Many of these businesses just don’t pull marketwide anymore. There was a time in Las Vegas where people would travel east to west and north to south so you could take an ad in the Review-Journal and it was cheap enough that it was effective for you. But if you’re a dry-cleaner in Henderson, you’re not going to pull somebody from Summerlin out to your place and there’s really no reason for you to advertise throughout the market.
Question:
How about the company’s alternative weekly, CityLife?
Answer:
We bought that from Wick (Publications) roughly a year and a half ago and it’s been good. My bias is that alternative publications are doing some of the best journalism in the country right now and I was anxious to try it myself. As you know, we actually launched an alternate pub in Las Vegas called Mercury which we then shut down after we bought CityLife. A lot of the same people who were in Mercury went to the City-Life staff. I’m not saying that we’ve figured it out completely yet because alternate pubs need to be incubated by themselves. They cannot be integrated in with the newspaper. That’s the premise we have at this point. We feel like if we tried to run that out of the Review-Journal newsroom, we’d just end up killing it.
Question:
Why did you take on the Hispanic newspaper El Tiempo? How is it doing?
Answer:
Great. We bought that from a small entrepreneur and it’s really grown, probably has a dozen on staff now. It’s a rack-and-stack paper, meaning it’s delivered to locations and people just pick it up for free. It has almost no returns, which we think is tremendous. People are picking it up and reading it, we hope. From a pure profit-and-loss standpoint, it’s good. There are a lot of Englishspeaking retailers who want to reach the Hispanic market and this does the trick for them.
Question
How is your newest publication, Rebel Nation, doing?
Answer:
Well, we’re looking forward to basketball season right now. Rebel Nation is something near and dear to my heart and we are going to give it a good shot, meaning that we don’t start these things and if they don’t make a profit in a couple of months, we’re not going to kill it. We’re going to give this thing at least three years. I think there are a lot of people out there who really want to feel good about UNLV sports and this publication is trying to fill that niche. It just started and we actually broke even. The way we sell this, by the say, is that we try to sell it for the whole year so we don’t have to go out and resell it week after week after week. We got enough advertising to basically cover our cost so we’re happy about that.
I wanted to do it a couple of years ago, but I just couldn’t find the right person for the job. When we finally came across Steve Guiremand, we realized that now is the time to start it and he’s done just a great job in getting it started. The coaches have been tremendous, very supportive. You can understand, this becomes a great recruiting tool for them to say, “We’ve got this.” There are a lot of these publications around the country. Most of them are cottage industries and this one probably will be a cottage industry too. I can’t imagine making a ton of money with this, but I think in the end, we’ll make a small profit and fill a niche and scratch an itch that some people have.
We’re hoping that we can prove the point to the university that this is really valuable to them. Sometimes we don’t get the distribution we want with the university, but we understand this is brand new. We’d love for the Rebels to win a few more games, but teams win and lose. We’re not reinventing the wheel on this. We have a magazine called Hog Illustrated, which is dedicated to University of Arkansas sports, which is going great. So this is our second one. We may do this in other markets.
Honolulu is another area for there is a market for it and there is no publication like this. We’re happy, but I don’t want to give anybody the impression that we’re going to buy anybody’s bank anytime soon with Rebel Nation money.
Question:
Both Stephens and the Greenspun Corporation have daily publications, community weeklies, alternative weeklies and magazines. But you diverge on broadcast and book publications. Why does Stephens have a book publishing arm and how profitable is it for you?
Answer:
If I knew now what I knew then, I don’t know that I’d be in the book publishing business. It is a tough business. Despite the fact that it’s a tough business, there’s a certain charm in books. First of all, it gives an outlet to our writers and part of the trick of being a successful newspaper in Las Vegas is being able to find the talent. Being able to offer talent the opportunity to do books helps us in recruiting. Secondly, I have an ongoing love affair with Las Vegas and Nevada and books about Las Vegas and Nevada are pretty slim pickings. There are just not a lot of publishing houses that will publish a book from a writer in Las Vegas or Nevada. So, I wanted to do that.
It’s really not a cash-intensive business. If there is a cash-intensive part of the business, it’s in marketing and I can do that in Las Vegas. Can’t do it worldwide, I can’t even do it in the Southwest, but I can do it in Las Vegas. Some of our books we do because we hope to really turn a profit and some of our books we do because we really believe that the content is worth doing. So we take a loss and we smile about it and we look back at the books and say, “That was a good thing.” It’s definitely old technology. But anybody who wants to compete with us on books is welcome to it.
Question:
My theory is that when it comes right down to it, you and Brian Greenspun aren’t really that much different from one another: You’re smart businessmen and you have strong opinions. Isn’t this whole Sun vs. R-J thing just a ploy to sell newspapers?
Answer:
This is not the first time I’ve heard that. It’s a relatively new theory that this is all sort of an act. I can promise you — and I’m sure I speak for Brian when I say this — that this is not an act. There are times when we are absolutely fit to be tied with each other. We do compete with each other in a lot of different ways. I’m sure he would tell you that he does things just to compete with us. I’m not going to say the reverse, but I’ll leave it to your imagination.
I will say that people, on the other hand, think we can’t be in the same room with each other without wrestling each other to the ground. I try to tell people that that’s not true. We do, not often, but we do periodically enjoy each other’s company. We have actually gone to dinner with each other without stabbing each other in the heart. We find that it’s much better if we take our wives with us. I think Myra’s a wonderful person and she did go to Scottsdale High School or someplace like that. It is an interesting question, but we’re not that smart. Pretty much what you see is what you get. However, I’ve always said that if we could ever find time to actually do things together, we’d be a pretty formidable force. But that hasn’t happened yet.
I just had something happen not long ago. I’m sitting on a nonprofit board and they asked me, “Would it be OK if we asked Brian Greenspun to sit on the board?” And I said, “Well, are you suggesting that we can’t sit on the same board together?” But they thought that. They said, “Well we don’t want you to quit.” I’m not going to quit. I think it stems from the fact that we write columns and criticize each other and people aren’t used to seeing that. It is a throwback from ’40s and ’50s journalism, but I have found that when the Sun and the R-J go after each other, there are a lot of people who pick up the paper, buy it and read it, wondering what could be next.
Question:
Who wins on the golf course?
Answer:
Brian is a way better golfer than me. And I cannot believe that the last time we played, he said he was a 10 handicap. That is so far from the truth.
Richard N. Velotta covers tourism for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4061 or by e-mail at velotta@lasvegassun.com.
